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Law 11/2020, of 18 September, on urgent measures regarding rent containment in housing lease contracts and the modification of Law 18/2007, Law 24/2015 and Law 4/2016, relating to the protection of the right to Fast guide housing. Effective date: 22 September 2020 To the rent price containment law Purpose of the Law The purpose of the law is to contain and moderate the rental price in certain areas that, due to their characteristics, do not guarantee rental housing at an affordable price, thus hindering access to the entire population. What contracts does it apply to It applies to rentals of homes intended for permanent residence and that are located in places that have been declared tense housing market areas. Tense housing market Reference price Price increases Contract and incidents Tense housing market Reference price Price increases Contract and incidents Can all municipalities be declared tense housing Who can declare a tense housing market area? market areas? • The Department of Territory and Sustainability of the No. For a municipality or part of it to be declared a tense Government of Catalonia housing market area, it must have a reference index for • The following local authorities: rental prices. - Barcelona City Council, in Barcelona - the Metropolitan Area of Barcelona, in the 36 municipalities comprised in it This declaration can be made by: What is a tense housing market area? - own initiative - at the initiative of the corresponding town councils, They are municipalities or parts of a municipality county councils or provincial councils (neighbourhoods or districts) at risk of failing to make rental housing available at a price that is affordable to the entire population, because one of the following situations applies to the average rental price: • sustained growth well above average for Catalonia How long does a tense housing market area • represents a burden on the family or personal budget of more than 30% of the usual household income declaration last? • exceeds 30% of the average income of people under 35 • The declaration cannot exceed 5 years. years of age • It can be revised to shorten its duration or it can be • in the last 5 years, accumulated year-on-year growth of at invalidated. least 3 points above the Catalonian CPI • It can be extended if the circumstances that motivated it continue. • The administrations involved must state the actions that they will carry out during this period to mitigate or change the tense market situation. Fast guide to the rent price containment law 2/10 Tense housing market Reference price Price increases Contract and incidents To which municipalities does the Law apply as of its Sant Vicenç dels Horts El Vendrell effective date? Santa Coloma de Gramenet Vic Santa Perpètua de Mogoda Viladecans On a transitional basis, the Law has declared the following Sitges Vilafranca del Penedès sixty-one municipalities as tense housing market areas: Tarragona Vilanova i la Geltrú Terrassa Vilassar de Mar Badalona Montcada i Reixac Tortosa Barberà del Vallès Montgat Barcelona Olesa de Montserrat Blanes Olot Calafell Palafrugell Castellar del Vallès Pallejà For how long will the tense housing market area Castelldefels Pineda de Mar designation apply to these municipalities that have Cerdanyola del Vallès El Prat de Llobregat been set transitionally? Cornellà de Llobregat Premià de Mar Esplugues de Llobregat Reus For a period of 1 year. Figueres Ripollet After that year has elapsed, the competent bodies may: Gavà Rubí • Gerona Sabadell Issue a new tense housing market area declaration for that municipality in accordance with the established procedure. Granollers Salou L’Hospitalet de Llobregat Salt • Do nothing, in which case the municipality will no longer be Igualada Sant Adrià de Besòs considered a tense housing market area. Lérida Sant Andreu de la Barca Manlleu Sant Boi de Llobregat Manresa Sant Cugat del Vallès Martorell Sant Feliu de Guíxols El Masnou Sant Feliu de Llobregat Mataró Sant Joan Despí Molins de Rei Sant Just Desvern Mollet del Vallès Sant Pere de Ribes Fast guide to the rent price containment law 3/10 Tense housing market Reference price Price increases Contract and incidents When does rent containment not apply? What is the Rental Price Reference Index? Rent containment does not apply, even if the affected area has The rental price reference index is a public consultation been declared a tense housing market area, to homes that: indicator that makes it possible to estimate the average rental price per square metre of a home located in a given area, as a • Have rental contracts signed prior to 1 January, 1995. function of certain defined characteristics. • Have a specific system for determining rents: This Index is determined and published by the Department of - social housing Territory and Sustainability of the Government of Catalonia, - integrated into public insertion networks or social and is calculated based on housing data that we must enter renting mediation, or into a rental housing fund for into a form. social policies - welfare housing - compulsory social rent What is the maximum rental price for a home in a It also does not apply to contracts prior to the effective date tense housing market area? of this law, which will continue to be governed by the law ap- plicable to them at the time they were concluded. In rental contracts that are concluded in tense housing market areas, rent may not exceed either of these two limits or caps: In the event of a novation, the new rent containment law will only be applied if the novation implies an extension of the • The reference price for renting a home with analogous duration of the contract or modification of the rent. characteristics in the same urban environment. • The previous rent updated according to the In the declaration, application of rent containment can be Competitiveness Index if the home has been rented in the excluded for dwellings with a useful surface area greater than last 5 years. This last criterion does not apply in these two 150 m2. cases: - The previous tenant was a relative of the home owner and that led to this lower rental price. - The contract affects a home that was initially excluded from the application of this law because it is subject to a special system for determining rents. Fast guide to the rent price containment law 4/10 Tense housing market Reference price Price increases Contract and incidents And what is the reference price? How can the tenant know the previous rental price? The reference price of a home is that established from the Advertising of rental housing that includes the price located Rental Price Reference Index, without taking into account in a tense housing market area must indicate the previous the upper and lower margins, increased or decreased by 5% rental price, updated in any case with the competitiveness depending on the characteristics of the home. For this increase guarantee index. In addition, the home-owner must inform the to occur, the home must have at least three of the following tenant responsibly and in writing of the date and amount of characteristics: the rent of the previous lease. Likewise, the tenant may request information from the previous rental contract from once • lift Incasòl the rental contract has been signed, or beforehand if they have • parking a written authorisation from the owner, • furnished home It should be noted that: • heating or cooling system • Concealing from the tenant that the rental contract is • communal shared use areas subject to the rent containment system, or the rental amount from the previous rental contract, implies the • community pool or similar equipment commission of a serious infraction. • concierge services in the building • Failure to include the information necessary to calculate the • special vistas maximum price in accordance with the rent containment system (that is, in any case the reference index price and, if it exists, the rental price from the last contract) represents a minor infraction. What is the Competitiveness Guarantee Index? When the price of the previous contract is taken as a reference, the amount of the rent agreed in said contract must be updated with the Competitiveness Guarantee Index. To know its value, the INE (National Institute of Statistics) website must be consulted. When this index shows a negative value (as it has since 2015), the update is 0%. Fast guide to the rent price containment law 5/10 Tense housing market Reference price Price increases Contract and incidents Does this law also affect newly-built homes, or What if different parts of the home are rented homes that have undergone a major rehabilitation simultaneously? process? In this case, the sum of the different rents existing They are not affecteduntil 3 years after the Law becomes simultaneously in the same dwelling must not exceed the effective, that is, until 22 September, 2023. maximum rent applicable to the dwelling as a unit. As of that date, the reference price of a newly-built home, or one that has undergone a major rehabilitation process, is established from the Rental Price Reference Index, taking into Can general expenses and individual services (IBI/ account the upper margin. Real Property Tax, rates, community of owners, etc.) Exception: If public subsidies have been obtained, the rent will be passed on? be applied according to the index without the upper margin. It should be taken into account that failing to comply with Expenses can be passed on if agreed with the tenant. In these rent determination criteria is a serious breach of the this case, these items must be recorded in a detailed manner law. on each monthly receipt, distinguishing them from the amount of the rent. However, if the home has been rented in the last 5 years, only the expenses considered in the previous rental contract can be passed on, even if the home changes tenant.

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